Question: Using the following chart what is the logic behind the answers for 8 and 9 Company ABC LMN XY Z Number of Shares Outstanding 100



Using the following chart what is the logic behind the answers for 8 and 9



Company ABC LMN XY Z Number of Shares Outstanding 100 million 1 billion 10 billion Price (Day 0) 75 50 Day 1 Return +2% -2% -2% 8. Consider an equal-weighted version of the index. At the end of Day 1, to maintain equal weightings, which of the following trades will be necessary? A. Buy additional shares of ABC, buy additional shares of LMN, and buy additional shares of XYZ. B. Buy additional shares of ABC, buy additional shares of LMN, and sell shares of XYZ. C. Buy additional shares of ABC, sell shares of LMN, and sell shares of XYZ. D. Sell shares of ABC, buy additional shares of LMN, and buy additional shares of XYZ. E. Sell shares of ABC, buy additional shares of LMN, and sell shares of XY Z. F. Sell shares of ABC, sell shares of LMN, and sell shares of XY Z. 9. If company LMN splits its stock 2-for-1, which of the following is most correct? . LMN's weight in the cap-weighted index will increase LMN's weight in the cap-weighted index will decrease LMN's weight in the price-weighted index will increase . LMN's weight in the price-weighted index will decrease LMN's weight in the equal-weighted index will increase LMN's weight in the equal-weighted index will decrease WWUOWCD
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